Nikita Shamgunov On Building A $1 Billion Business And Now Raising $54 Million To Create A Cloud-Native Database Service

Nikita Shamgunov built a $100M revenue company, before joining Khosla Ventures to invest in other startups. Now he is going at it again, with a new tech startup that has raised $54M in just 16 months. The company, SingleStore, has attracted funding from top-tier investors like Prosperity7, Hewlett Packard Enterprise (HPE), Dell Technologies Capital, and Insight Partners.

In this episode, you will learn:

• Launching versus incubating startups
• Creating category winners
• His top advice when launching a business

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About Nikita Shamgunov:

Nikita is passionate about deep tech, data infrastructure, and system software.

Prior to Khosla Ventures, Nikita co-founded MemSQL and served as CTO and then CEO, successfully scaling the company to over 40M in ARR and near profitability. He also worked on data infrastructure at Facebook and before that, was a systems software engineer at Microsoft SQL Server for six years. The company is called now SingleSotre.

His latest venture is Neon. Neon is building open-source cloud-native PostgreSQL. In essence, Neon is a serverless Postgres database that enables developers to move fast without managing and scaling infrastructure. 

It automatically scales up or down based on demand and gives users bottomless storage out of the box. Neon also enables developers to instantly branch your data the same way you branch your code, making it a perfect fit for CI/CD and Preview Deployments.

Nikita graduated from St. Petersburg ITMO University in Russia with a PhD.

Connect with Nikita Shamgunov:

• Crunchbase
• LinkedIn
• Twitter
• Forbes Councils

Read the Full Transcription of the Interview:

Alejandro Cremades: Right? Hello everyone and welcome to the dealmakerr show. So we have a very exciting founder today. You know we’re going to be talking about both sides of the table. You know on the operator side on the investor side. You know we’re going to be talking about building scaling. You know, financing all the above all the good stuff that we like to hear. And think that you’re all going to find you know this story of this founder very inspiring so without further ado. Let’s welcome. Our guests today Nikita Shamgunov welcome to the show.

Nikita Shamgunov: Excited to be here. Thanks for having me.

Alejandro Cremades: So Nikita so let’s do a little of a walk through memory lane. How was life growing up in Russia and.

Nikita Shamgunov: Ah, that’s was that was a lot of fun. Um actually and um, if I look back the events of of my childhood. Um, it was the memorable ones where kind of the Berlin wall came down. Um. And that was in the news right? I was not in berlin obviously I was in Russia and in a relatively small city called yukaturinburg um, but that was was was definitely hit the news. Um, and then um, that kind of so not that event but timewise. Um, after that a lot of things started happening. You know the fall of Soviet Union ah the hyperinflation um in the ah early 90 s um and then um ah just kind of a very very quick transformation from what used to be soviets union and planned economy and iron curtain. Um, to opening up of the country to the world. Ah, and that was um, felt both scary. Um, ah and exciting. You know I was very young at the time and so my parents um, kind of I would say sheltered me from the. From the harsher realities of things. Um, you know of ah the economy and hyper inflation and whatnot. Um, but it was certainly a ah brand new world. Um, that we we were experiencing in. Um and I’d say my generation took the full advantage of it. Um, one thing. Um.

Nikita Shamgunov: Ah, is ah that was there and it’s a similar phenomenon for that of of what I read in in this book. Freakonomics um, was um at my high school and and I and I went to um, an elite math high school that’s called soons. Um, whatever that means. Ah, which I think stands for special scientific and research center something like that in that high school. Our teachers were university professors and looking back. Um I realized that um the reason we had those those folks. And they were relatively young. They would be like ah assistant professors. Um, ah you know today they were all in their like mid late 20 s or maybe early 30 s ah, the reason we had them is because they they needed to moonlight they they needed to to have their ends meet um and they would go into a good high school with. A lot of talented kids. Um and teach them more math teach them computer science teach them science. Ah, and um that that set the foundation of ah of my early education and interest and there was a lot of passion towards towards towards math during those days. Um. Both my dad and I granddad are mathematicians um, and at that time I thought I’d I’d be a mathematician too. Um that the the brand new and exciting world of computer science started to kind of pull me into that universe and eventually eventually that became my life.

Alejandro Cremades: I mean obviously you know computer science. You know why say what ended up taking its scores. Ah but in your case you know like when you moved to St Petersburg for the ph d you know there was like a very interesting shift. You know there that happened and and that that got you to land into Microsoft. So so what happened there.

Nikita Shamgunov: Yeah, for sure. Um, so ah, my my interest in computer science kind of manifested in in the desire to participate in programming competitions. Um, and and I started that in high school. Um I was mildly successful I you know never made it into the country level or or international level. But I continued at it. Um, at at the university um, and there was a programming competition which still exists. It’s called Acm icpc. Ah which I started to participate in um and eventually made it into the world stage. Ah, we we went to? um I think it was Netherlands and then another time we went to to Vancouver canada and and got to to a bronze medal. Um, so so that interest in programming competitions eventually what pulled me into the computer science. Ah program so I did my bachelor’s in math and masters in in computer science. Um, and the best school in computer science was in St Petersburg that is a university in five mechanics computer science find mechanics and optics and is still one of the top schools. Um, ah in Russia. Ah so.

Nikita Shamgunov: Just kind of staying on that programming competition train and refusing to grow up I guess I I went ahead and joined that school for the ph d program and moved from yukiurenburg to St Petersburg um I was doing ph d and working full time to again to to support myself. Ah. And some of the folks at that company joined Microsoft I was referred there and post graduation I packed my bags which I had won so ah and and moved to to Redmond to work for Microsoft.

Alejandro Cremades: So when you were working at Microsoft you know, obviously the idea of going back to school came about you know business school. Ah, but when you actually executed on that you know you land on business school and you quit the same day I mean that’s kind of like ah a little bit of aggressive. Hey there any keta what happened.

Nikita Shamgunov: Yeah, that was ah that was a funny story. Ah so I was um at the time I think it was like about 4 years I worked for a very very capable team inside Microsoft called Microsoft Sql server ah that’s where I truly understood how to build systems. Um. And complex systems and databases I started to get a little bit restless and and and trying to figure out what is what is what is next um, for me. Um, and then I was like oh business school that sounds interesting. Um, ah, potentially you know, ah people who are good at computer science but have no idea about business. That’s what they do? Ah so so I applied and and and passed all this like exams which I think was sat and whatnot and then I joined the business school I was super excited I walked in in the first day and my thesis was that I’m going to meet. Some very very capable people who are business leaders. Ah, and then will learn a bunch from them in addition to you know ah from the program. But as we were going around the table and and sharing our experiences I realized that the folks were kind of lost. Ah, and then I realized that about myself as well. So I was probably lost as well in that moment. So so I quit the first day and um at the time I already had a Facebook offer so I took that offer and flew down to California um I basically changed my thesis my thesis became

Nikita Shamgunov: Um, I’m going to move to to the Silicon Valley where the mindset and um and the entrepreneurial spirit is high um and then I’ll meet people ah that I’ll be more inspired about ah and then eventually maybe we’ll start a company. Um. So what happened is um as as I joined Facebook I met my cofounder.

Alejandro Cremades: And actually you know like that’s what what ended up happening. Ah you know one thing that you found there was that the culture of Facebook was saying completely different to the culture of Microsoft so why was that the case and and what would you say you know were the sequences of events that really led you to. Ended up. You know, starting your first business because I mean there were like certain things there that got you to start reading essays from Paul Graham and y combinator and things like that. So what were the sequence of events there that needed to happen.

Nikita Shamgunov: Yeah, Paul Graham was already famous I started reading his essays at at um, at Microsoft but the gravity of of that personality and and the gravity ofycombinator wasn’t really fully understood while I was in Seattle as I moved down. Um. I realized that Facebook was wildly different from Microsoft just the pace of everything that that was happening like the clock speed was of the company itself was a lot higher. Ah Facebook was in the hypergrowth mode. Um I believe I was either engineering employee 800 or there was a total employee hundred of of 800 and the the company was was growing rapidly right? Um, um it it felt like stuff’s just flying around people picking it up getting it done. Um, and then that was definitely the move fast break things era um. The mindset of the people that that walked in and through the door and ah Facebook was onboarding everybody in batches that was called bootcamp um was also very very different from what I see at Microsoft um, and especially in such an established team asql server where the pace is slow. The group is definitely is is okay because the you know the team’s bigger, but the the product is established and whatnot here. You know lots of new things. Lots lost focus on building rather than maintaining and whatnot. Um and that’s where I met my cofounder um with whom we applied to ycombinator.

Nikita Shamgunov: Um, through that we I understood a little better ah ah what what kind ofycombinator really was we met Paul Graham and ah, um, and then we had a tough choice. You know, do we want to leave Facebook and all this early stock which was already apparent how valuable that was um. Ah, ah or we should you know stay at Facebook and and realize that stock or should we you know leave Facebook and and start a company and we already inside. Ah the y combinator we got accepted. We walk in with Facebook badges and and Paul Graham is looking at us and saying well you know. You got to get rid of that and so and so we did um and so that was that was a tough. Ah what are the that was a tough call. But I think it was the right call.

Alejandro Cremades: So what happened next.

Nikita Shamgunov: So so then it was a lot of grind I lived in the office. Um, ah Eric lived across from the office that was just ah, an apartment ah in San Francisco right across Costco Tenth and Harrison um, we stayed there a while until we started building. Our. Testing infrastructure bought a bunch of servers. They were loud. They were hot so it was impossible to live in the office anymore. Um, it was a lot of you know like we we have all this like glamorous um views sometimes of what startup building is like and and potentially Facebook. Ah, the social network movie ah may give you your own idea to own idea. But what it looked like is a bunch of folks um would would sit down in front of a computer and headphones and write code. Um you know day in and day out. ah hours hours and hours through the day. um I I think we did a lot of things right um and um and I think we got a few things wrong. Um I think long story short ah memsql that was the company and that became single store is now unicorn company. Um, it makes close to 100,000,000 in revenue. Um I believe ah and ah growing really fast. Um, it’s on the trajectory to go public. Ah there’s all these billboards and 1 on 1 um the timing of that is is uncertain because that that you know nobody’s going public right now.

Nikita Shamgunov: But um, it certainly is getting to a position to to do so.

Alejandro Cremades: Yeah, and what ended up being the business model of men sql. How does the company make money.

Nikita Shamgunov: Yeah, so and and and that’s ah, that’s really what? Um What’s so interesting. Ah, and now that I’m on venture. Um I’m thinking about those things um a lot. Um, because. Whatever model you choose and I’ll explain what the model of memsql kind of is and was um it you know comes with with with a particular um with a particular territory and and particular a way of of generating business. Ah single store. Um. You know we rename msql to single star because over time it wasn’t it was not longer in memory and it was not longer just sql so we were just basically our our name was misrepresenting what what we were and so we changed it to single star. Um, the the. Business model is ah and it’s an enterprise focused company um with with ever sales price um in the high tens ah low hundreds of thousands of dollars a year and um it it finds. Um. Ah, it finds as customers. Um, ah by by establishing what is called an enterprise ah marketing which is a combination of you know ads sp and account account-based marketing and attending enterprise events ah collecting small number of high- quality leads.

Nikita Shamgunov: Pushing those leads through the process through the funnel. Um, and that revenue comes on the other end of it and so you end up um, depending of the efficiency of this of this Enterprise Account acquisition. Um that the revenue Scales Um, with. Big step increments right? because every deal is like I don’t know a $100000 to $100000 and especially the expands could be could be very material. Um, but it also comes with the with the high customer acquisition cost and relatively long sale cycles. So You don’t need a lot of those deals to build a significant business but those deals are hard to get um um and ah it it takes a lot of energy and and then push up the company to ah to keep growing in the high pace.

Alejandro Cremades: Got it now now in this case, you know for the company. How much capital that you guys raise in total.

Nikita Shamgunov: Ah I need to check. But it’s in the in the three hundred s three hundred millions range um so um, over over multiple funding rounds and especially the later. Ah, the later rounds are all $100000000 plus um

Alejandro Cremades: 300 and

Nikita Shamgunov: They are what is called like mezanine rounds. It’s the round that you you get mostly to fund your sales and marketing um to keep the growth. Um, ah to keep the growth and and the bigger your bases right? they. Ah, the the harder is to grow because now if you want to grow 200% now you need to add you know it took all that time for you to get to 100000000 and now if you want to keep growing very high high pace like you now only have a year to add another $100000000 so it’s um. Ah, it’s it’s an expensive proposition. Um, but that’s what the name of the game is ah to to building a um, a high quality enterprise business.

Alejandro Cremades: Now for you. You know as part of this journey. You know you started as the Ceo and then you eventually transition to the Ceo role I mean that’s not ah, that’s not an easy an easy thing and in fact, you know many you know great c to ah ctos.

Alejandro Cremades: They’re not good. You know when it comes to the business side of things. So how was that you know, um transition period for you on and and how hard it was.

Nikita Shamgunov: Right? Um, so um, so now that I’m I’m kind of see having a ah broader visibility of of of other companies I I tend to agree the Cto to Ceo transition is rare. Um, and in fact, product to Ceo or marketing to Ceo or sales to Ceo I kind of see more of that. Um sometimes general manager to Ceo and general manager trained by a bigger company. Obviously um, ah I see those transitions. Um. Much more frequently than the cto to Ceo transition. Um, you know, um, depending on the circumstances of why? Um, you might want to? um, ah have this decision. So um, that could be different for for a particular cto that that. Sees it as ah as the next step. Um, the mechanics were the following. Um I had to make sure that my product and engineering team were are absolutely intact and humming and that required me to have leaders. That run product and engineering um and then um I forced myself to to shift my focus completely to go to market. So basically trust that the product and engineering are are working very well and trust the leaders and of course.

Nikita Shamgunov: You interact with them. Ah very very frequently. But despite the fact that the course skill set is in the product and engineering ah basically shift the focus and to go to market and go to market completely at that time they were you know Obviously there were 2 major. Problems in in front of of Men’sql one was well we didn’t have that much cash in the bank. So We needed to raise ah cash and you raise cash because you grow. Um, and if your growth slows down then raising becomes really really hard So we’re we’re in that situation. Where you know we had time to demonstrate that growth but it wasn’t a lot of time. Um and the specific thing that I did is um and and that’s like a hack um is to go to your existing customers and ask for more money. Ah and and obviously for those that. That you have relationships with um, you might feel a little scared but at the time that was the right answer. Um, and so I did and they and they gave us and they gave me the money and they didn’t even think that that hard and so that was kind of a revelation. So We we were either potentially undercharging Or. Um, or the other revelation is that if if you have a good relationship with your customer. Um, then? um, they they will give you money. Ah, if if you ask So So that was that was cool that was that was Learning. Ah.

Nikita Shamgunov: Um, and that allowed us to demonstrate almost 100% growth ah in a year and we raised ah around from Google so so that was one um and that’s how we solved the the ah the money problem. Um. And the second ah business ah problem that was in front of me was that the um that the whole business was transitioning into Sas and cloud and and memsql at the time was a hybrid offering. You know it had a on-prem offering and had a cloud offering and the checks for the on-prem offerings were higher. Then the checks for the cloud offering but it was clear. Ah it was very clear at the time that that’s where it’s heading it’s heading to the cloud ah to to all managed offerings and so now looking back. It’s like okay of course like who who cares about on-prem nobody cares about on-prem everybody cares about cloud. Um, so so that transition turned out to be harder than I thought I thought it was oh, it’s just code or it’s just technology but turns out um, having a saas company is an architectural change both in the product but also in the Dna of your company. You know in one world you don’t have devops in the new world you have devops and sres um in one world. Um, um, you care about? Ah, you know installation. Um, and then you support that installation with your sales engineers ah in the other world that is given you push button and you get it.

Nikita Shamgunov: And so and so the composition of your ah of your company is different and you start with your management team. Um, one of the one of the books and I was voraciously reading at the time one of the great books I read ah was only paranoid survived by Andy Grove where Intel was going from memory to cpu and Andy was coming into his management team looking around the table and realizing that he doesn’t have software people on the staff team and then once the decision of going hard off the cpu was made. Um, he had to change his management team and then such people changes are always hard because you know somebody could be you know in that case was a hardware you know memory expert and the the new Dna should be software expert. And you need to to forge new partnerships um with software companies and before that you had to forge company partnership with with hardware companies. So very very similar um process when you transition your company from on-prem and to the cloud. Your partnerships are different. Your team Dna is different your staff your staff team has to be different. Um and it took longer. It took longer. It took single store longer than I thought I thought it would be like a quick one year transition? Um, but it took years.

Nikita Shamgunov: Ah, today single store is decisively a cloud saas company. But again it took a long time to get there.

Alejandro Cremades: Now obviously it sounds like you were doing the right things because I mean you took the company from seven million to forty million ah but at what point I mean things were working out the way that you you know had hoped for so at what point do you realize? hey you know maybe it’s time to. Take a look at what’s next and and how you how do you end up landing on the other side of the table as an investor.

Nikita Shamgunov: Yeah, great question. Um, so um, at some point I hired um ah a um a co ceoo at singles store and um I was looking for president to to run the go to market. So so I I spent. A good amount of time nerding and go-to market and driving the revenue up and then I realized I also need a part a goto-market partner. Um, and I was looking for president but ended up hiring your co-ceo um and and and ah and the great leader Raj Burma ah so we we partnered up and then I shifted my focus back so from go-to markete ah back to um, ah back to product and engineering and in there I realized that I also need to bring a new leader and and and broad chief product officer. So. That was the first time in my in 10 years that my calendar emptied up. Um and of course as a founder I I knew that you know it’s only a matter of time. It is like start creeping back up and as a founder There’s so many things that you can. You can do that a high leverage to your business. Um, but it also had been ah, almost ten years by then in 9 years um and I was craving to to um to get to to certain amount of breath.

Nikita Shamgunov: Um, because when you build a company you’re looking at the world through this? Um, ah, ah through the keyhole of and what everything that’s surrounding you is is is your company and your team and and and whatnot um your team obviously gives you a ton of leverage. Um. But you’re missing on the breadth because um, ah basically it’s your technology your ecosystem your customers. Um and your competition. So and you live in this world ah day in and day out versus my thesis was ah that as you go into venture. You will see much. The world from a much broader angle you see a wider set of technologies and you’ll have an opportunity to to learn some of them deeply and that’s certainly deliberateed. Um, ah you know ah vi node funded memsql. Um, and Kosla Kosla ventures was instrumental through the um, the cte cto to Ceo transition. Um, and um basically getting the company into the the next rounds of funding ah and and through that the relationship got stronger and stronger and stronger. so um so viil invited me to the table um and um so I decided to join ah costla ventures as a partner walking in I said hey vi knowde I have good.

Alejandro Cremades: So so like yeah know I was just going to ask you so so so obviously here you are now you know in Costsla. Ah and you know it’s a different It’s a different angle right? on the way that that you’re seeing things and I’m sure that. You’ve had the opportunity to learn a lot you know because you’ve had you know a bunch of investments you know about 8 investments that that you’ve done but I guess now you know that you are in Kosla. How do you think about categories and then also category winners. You know I’m sure that you know you’ve been able to really have an insight. You know into and and and and a court side ticket you know on what it looks like you know when it comes to pattern recognition.

Nikita Shamgunov: Yeah, definitely? um I think there’s there’s many ways. Um, and that’s the beauty of a venture There are so many ways to look at the world. Um, and and one of those ways is um, splitting and I’m on the enterprise team. Basically ah working with with founders with enterprise founders with a lot of kind of business to business or business to developer or b two c to b type type companies. Um the way to look at this world is you can split it into categories and so in in like the database category there. Operational databases and and their analytical databases or data warehouses and in each category they’re typically 1 2 3 4 category winners um and in the modern day and age the number of real winners is like 1 or 2 in every category and if you squint at the world and you start seeing it not not necessarily just in enterprise software but everywhere. Um you start seeing you know 1 or 2 winners in every category and then either a lot of nothingness um or like a long tail of. Products and companies that don’t each make a ton of money and and in software that’s even more pronounced ah than in the real world. You know in the real world is like you know Pepsi Cola and Coca-cola right? and Coca-cola is like 50% pepsicola is another 25 and then it’s like a long.

Nikita Shamgunov: Tale of stuff but none of them is gigantic. Um, but in software it’s worse um in software is there is a winner there’s an uber there’s a lyft and then there’s just nothing. There’s iphone. There’s Android and then there’s nothing and so what this means for venture. Um, and there are particular reasons for for for um, for this dynamic in the technology world and the reason is mostly because of the um, the incremental cost of an extra copy of software or service is 0 right? And so once someone. Someone is winning. They can suck all the oxygen out of the category and and and kind of completely proliferate and dominate the category and and and there is a book that’s called play bigger about creating new categories that talks about um, um. Ah, about the dynamics in in the um in in category definition and in category domination by um, ah, by technological products and companies. Um, and so once you take that lens on the world. Um, the question is. You know is it a category leader and is as an opportunity is there an opportunity to become a category leader. Um always always comes in and usually every now and then there’s also a technology wave that is coming in and and sweeping through all the categories and giving. Um.

Nikita Shamgunov: You know our world The the world of entrepreneurs an opportunity to redo things from scratch um and previously that world was Cloud previously that world was um, ah mobile previously that world was social. Um, and then you know.

Alejandro Cremades: Got it.

Nikita Shamgunov: Previously that world was like the internet. Um, and if you think about um and so ah, you know this Enterprise World. It lives in the predefined existing categories. Um, and then again periodically either a new category gets created Cloud or mobile or whatever. And it comes either certain technology or or ah or innovation or disruption. Um that that really ah gives you an opportunity to change the architecture of each category and once you change the architecture. It’s a new product can be built and if I think.

Nikita Shamgunov: What’s kind of exciting is there’s always something like this like this technology platform transitions and we’re in the dawn of the next one which is ai and large language models which I think will will architecturally change a whole.. Basically every category um and each incumbent either takes advantage of this or will be disrupted by something that that puts this ai capabilities in the center of of the product. So That’s that’s super exciting.

Alejandro Cremades: Now in your case, you know you’re now at Kosla but you’re also you know working you know on neon right? So how does the idea of neon come about and and I mean obviously see in this case is a little bit different to single store because rather than starting you. Incubated you know neon you know as part of um, you know the costla you know, endeavor that you’re that you’re taking on and that you’ve taken on and and and how did that come about I mean it’s a little bit different of a journey here you know incubating and and and bringing it to lunch so tell us about this.

Nikita Shamgunov: Yeah, starting incubating is different and and and obviously I had an opportunity to do either here. Um, one of the ah competitors for single story snowflake and snowflake was an incubation from a firm from a venture firm called Southter Hill ventures and it’s. Particular individual called called Mike Spiser um and through that competition. Um I I learned and obviously snowflake is much bigger than single star. Um through that competition I learned ah about about some of the incubation playbooks obviously observing from the outside in. Um, but recently I actually ah you know met Mike and we sat down and we had a conversation about incubations as well. Um, so there is a particular playbook if you go online and Google my spiser incubation playbook you will. You will find ah some information about it. And the shiniest incubation out of solder hill is snowflake. Um, so um, I actually thought about this idea and this company incubation or starting um doesn’t matter for for about 5 to 7 years at least 5 and and and I was finding myself in a in a similar place as I know Tony Fidel as he was thinking about building nest thermostat but he was busy. He was busy building ipod and then iphone. So obviously Tony was on the on the journey of of changing the world with Apple.

Nikita Shamgunov: But he had this idea about the nest thermostat and the and the back of his head and he was hoping that somebody will go and build it. Um, but no one did and so with nian I I was in a similar abode I was thinking about? oh you know, unlike this um enterprise focus ah of. Um, single store and and chasing scale out workloads like big scale workloads. Um, which bring a lot of dollars but they’re not as many of them. Um, can we build a developer firstt technology that people start building their applications with and I couldn’t. I couldn’t build it at a single store because it just didn’t make sense for single store to do that. Um, the architecture of the product and the company was already set um and with Meon. Um, it’s another database company. But um, yeah, yeah, you know the architecture of the product. But also the architecture of how it goes after after its users is very very different. Um and it was um, you know again, it was impossible to to change that at single store. Um, so I walked in into coastline and said vi no we should incubate this. Um. And and the node is like yeah um, you know what do you need Um, and just ah, a few months later we um I put together first a slide deck then a team. Um the difference between starting and incubating um is um.

Nikita Shamgunov: When you incubate um you you can so really engineer. Um, ah your your founding team and in the process of that engineering of the founding team. You have the the power of the venture firm behind you ah and that comes down to recruiting. That comes down to to continuous debate about you know should we do a versus b versus c and how um, ah and um, ah you also have a brand behind you. So um, so engineering the the company Dna.

Nikita Shamgunov: Um, and and Viot likes to say that the team you build is the company you build not the other way. Um, was our kind of joint ah effort and joint endeavor in the beginning in the early very very early stages of the company. Um, in return. Ah, costla ventures has an unfair ownership compared to all the other funders ah into the company and and that’s what the tradeoff of of the incubation ah versus starting ah versus starting is ah since neon raised $54,000,000 um, you know codeslip with 5 initially.

Alejandro Cremades: Got it.

Nikita Shamgunov: Um, and now the company has raised ah but you know $54000000 from you know, Kosla founders fund a lotgill um, general catalyst ah and ggv and and each one of those investors and and a long tail of angels as well. And each one of those investors is fantastic and and bringing a lot to the table. Um, but again the original kind of hatching the company and you know engineering the company Dna ah was happening here at gula ventures.

Alejandro Cremades: So Nikita Imagine you go to sleep tonight and you wake up in a world where the vision of neon is fully realized what does that world look like.

Nikita Shamgunov: Well, um, so um, there there are a few things there. Ah first um, every app in the world needs a database and it’s a no brainer and no regret move to create that database on neon. And so what is neon is serverless postgres ah postgres is that you know very popular database technology that existed for for many many years that is incredibly popular in developers and outside of the top 5 databases in the world postgres is the only one that’s growing so everybody else is shrinking. Mindshare and and market share so mysqloraclesql server those are the top 3 then postgres and mongo out of the top 5 only posts is growing and postgres doesn’t have a home like there’s no company that’s behind postgres. It’s kind of like linux. It’s a truly community led effort. As a matter of fact, these ah even more so decentralized than linux. So linux has linus and postgres has a group of committers that are decentralized and um, you know they’re making decisions at what goes in and what goes out um and the developer experience. Ah, is what makes that a no regret move to take your when you need a database to go and create one on ion. Um, and and that’s a combination of how easy it is um what the economics are how how how cheap it is well not.

Nikita Shamgunov: Necessarily cheap but like how economical it is um how convenient it is and how reliable and robust it is um so you also might be thinking you know we had git as a source control system. Um, but it is an absolutely no regret move. To put your git repo on github right now, right? And so this is what we’re building. Ah we’re building a github like both experience. Um convenience. Ah, and um, ah, kind of economics of putting your postgs workloads on yeah on onion. Um, and it has been you know doing very very well. Not only we raised fifty four millions ah um in in sixteen months ah but you know raising this much money is only possible if you demonstrate traction. Ah so there’s already Eleven Thousand Thousand five hundred as of today databases on the platform. Growing rapidly lots of partners are coming on board. Um, so unlike singles storere we having this kind of groundswell um, coming in. Um there’s a big question. How much money we’ll be able to generate. Um, but we have so much cash and and so much growth. So we can stay in that state for a long time to just kind of proliferate around the world. Um, again driving towards that kind of github-like vision of becoming the default platform ah for postgres workloads to start, but then for every database workloads in the future.

Alejandro Cremades: Nice now. Obviously here we’re talking about the Future. So now I Want to talk about the past and learning from it. So if you were to go into a time machine and then let’s go you know bring you back in time you know perhaps to that moment that you know you were thinking about starting this. If you could go back and give yourself I mean starting starting single store. Sorry your previous company if you could go back in and give that younger self a piece of advice for launching a business. What would that be and why given what you know now.

Nikita Shamgunov: I Think the hardest lesson of single store was um, um, building hybrids versus building the future. Um, So I think that you know eventually we we founded ourselves realizing that the business is in the Cloud. Um, and the hybrid and the on-prem part of the business um is more of a liability than an asset. Um, but we had to treat it as an asset because most of the revenue was there. Um, and and that transition is is a is a really really tough transition. Um. You will either stay Forever hybrid and that’s the right thing to do but in technology it rarely is once the technology gears shift you find yourself in this like absolutely new world. Um, you know, um, and so you don’t want to find yourself selling pagers in the age of Iphones. Um. And in every category there you have your own pagers and you have your own iphones and and it means something different. Ah for every category and for every product that you’re building. So um, yeah I mean the the biggest The biggest realization is is to build new and build the future and.

Alejandro Cremades: Yeah, so.

Nikita Shamgunov: Um, be uncompromised on the purity of what you’re building. Um, ah you may get the future wrong. You may get the timing wrong? Um, ah, but if you want to succeed and in a very very big way. You got to build the future. Um and and kind of only the future. And the rest will kind of um you know, pull yourself if you if you get the if you got the future right? And if you execute um you know, kind of relentlessly if you do that you’re not wasting time in various hybrid architectures. And you’re not building transitional technology. You’re building the future technology you’re building Tesla’s you’re not building priuses in a way. Um and and numerous examples I can name where where this approach is the right approach and because the world is so big there there you know there there are counter examples for that as well. Um I think just just it’s a lot more fun to build a future too.

Alejandro Cremades: Yeah, no kidding now for the people that are listening. You know that will want to reach out and say hi. What is the best way for them to do so.

Nikita Shamgunov: Um, so Nikita at costlaventures.com as well as Nikita at neon dot tech um are the the best ways to to to get me I’m also on Twitter yeah I’m also on Twitter so do follow me on Twitter.

Alejandro Cremades: Amazing! Well hey Nikita So.

Nikita Shamgunov: Dm me on Twitter dms are open ah Niki database. So it’s like a combination of of of my name and the recognition that I spent the last fifteen years building databases.

Alejandro Cremades: And what’s the handle on Twitter amazing! awesome.

Alejandro Cremades: Love it. So Nikita. Thank you? So so much for being on the deal maker show today. It has been an honor to have you with us. Thank you.

Nikita Shamgunov: Really happy to be here. Thank you for for great questions.

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